Arconic Corp, a US-based supplier of aluminum sheet and plate products to the aerospace industry, has announced that it will be acquired by private equity firm Apollo Global Management Inc. in a transaction of around $5.2 billion. The acquisition is expected to close in the second half of 2023, pending regulatory approval and other closing conditions.
Under the terms of the deal, Apollo will pay $30 for each Arconic share, representing a premium of 35.6% over the closing price of Arconic shares on February 27, the day before reports of the deal surfaced. Arconic’s shares jumped 28.6% to $29 before the bell on the day of the announcement.
Apollo in the forefront of Aerospace Industry
Arconic, which counts Boeing Co among its clients, has struggled in recent years with falling metal prices and operational issues, including production outages at its facilities in Lancaster, Tennessee, and Davenport. These issues have made the company an attractive takeover target for private equity firms.
Arconic had previously rebuffed an almost $10 billion offer from Apollo in 2018. However, two years later, the company split into two publicly traded firms, Arconic Corp and Howmet Aerospace Inc, which made it easier for potential buyers to acquire the company. The acquisition of Arconic by Apollo will allow the private equity firm to take advantage of the company’s strong market position and leverage its expertise in the aerospace industry.
The acquisition of Arconic by Apollo is expected to have a positive impact on the aerospace industry, as it will provide the industry with a strong and reliable supplier of aluminum sheet and plate products. The aerospace industry is currently facing significant challenges due to the COVID-19 pandemic, and the acquisition of Arconic by Apollo is expected to help the industry recover by providing it with access to high-quality aluminum products.
The acquisition of Arconic by Apollo is a significant development for the aerospace industry, and it is expected to have a positive impact on the industry’s future growth and development.